One way to enhance the organization of your information in QuickBooks and get the most out of your accounting system is to take advantage of class tracking. Using class codes adds another layer of detail to your data which you can then use for additional reporting. One reason classes are so helpful is because they can be used with any type of transaction and in conjunction with any account.
How To Get Started With Class Codes
The first step to using class tracking is to make sure that the setting is turned on in your QuickBooks file. To do this you’ll want to go to your organization's main menu and then select Company Settings. From there you will see a Company menu and within that a section called Categories. Check to see if Track Classes is on or off, and turn it on if necessary.
Once your settings are set, you are ready to add class codes to your class list. Again, go to your organization's main menu and then select All Lists under the Lists heading. From there you will see Classes, which is where you will create and edit your class list. To edit or delete an existing class, use the drop-down menu that appears next to it. To create a new class, use the New button at the top of the screen.
To use your new classes, look for the Class column in any screen where you are entering information. Under that heading you will have a drop-down menu of all your classes.
Tips To Get The Most From Your Class Codes
Think about what your organization can gain from using class codes and what information would be most valuable. Class codes are flexible and can be used for many different purposes depending on your needs.
When setting up class codes, it’s often useful to set up two codes for each item you want to track - one for expenses and one for revenue. You may want to simply name these starting with an E or R to distinguish between the two. For example if you are using class codes to track different projects, you may set up “E-100 Project A” and “R-100 Project A.”
Once you have begun to use your class codes you can run a Profit and Loss by Class report, which will show all expenses and revenue entered for each class code.
Be consistent with entering a class code and periodically run a report showing unclassified transactions to see if anything has been missed that should be coded.